Stress on policy measures to boost export earnings through enhancing competitiveness

Professor Rehman Sobhan, Chairman of the Centre for Policy Dialogue (CPD), stressed the importance of prioritising the preservation of Bangladesh’s $8.0 billion export market to the US, following President Donald Trump’s announcement of a tariff hike.

He called for policy measures to boost export earnings through enhancing competitiveness, rather than depending on increased imports from the US to address trade imbalances.

The prominent economist made these recommendations on Thursday while speaking as a special commentator at a dialogue titled “Trump Reciprocal Tariffs and Bangladesh: Implications and Response”, organised by the CPD at a hotel in the capital.

Rehman Sobhan said China remains the main target of President Donald Trump's tariff policy, as it is the world’s largest economy by purchasing power parity and holds the highest competitiveness both domestically and globally.

The trade war would create opportunities for boosting export from Bangladesh to China, he said adding that, China—despite being the largest garment exporter to the US—exports around $17 billion annually, significantly more than Bangladesh’s $7.0 billion.

Facing a 145 per cent of tariff, China's exports to the US could drop to nearly zero, Rehman Sobhan noted, adding that countries like Bangladesh, Vietnam and Cambodia may fill the $17 billion gap—highlighting the need for Bangladesh to focus on boosting competitiveness rather than merely narrowing the trade gap.

“With limited confidence, we are exploring ways to increase imports from the US without a clear strategy, while under the Most Favoured Nation (MFN) principle, any concessions must be extended to all countries—underscoring that imports should ultimately be guided by competitive market dynamics.” He said.

He said that Bangladesh should be careful in formulating its policy responses, with a focus on promoting exports to alternative markets over the next two years.

To expand export opportunities through greater competitiveness, the country should prioritise the European Union, where it currently enjoys duty-free access.

Enhancing competitiveness would open up export opportunities in key markets such as the EU, Australia, Canada, and Japan, he said.

“And of course, there are significant market opportunities in Asia—particularly in Southeast and East Asia—that Bangladesh should strategically explore and tap into,” he added.

Mr Sobhan also said that global trade, economic growth, and investment sources are shifting, with Asia poised to become the world's dominant economic hub within the next five years.

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